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NOT FOR PUBLICATION
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UNITED STATES BANKRUPTCY COURT
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EASTERN DISTRICT OF CALIFORNIA
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MODESTO DIVISION
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In re ) Case No. 10-91936-E-7
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WALTER RALPH PINEDA, )
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Debtor(s). )
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13 WALTER RALPH PINEDA, ) Adv. Pro. No. 10-9060
) Docket Control No. WRP-5
14 Plaintiff(s), )
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v. )
15 ) DATE: March 23, 2011
BANK OF AMERICA, N.A., et al, ) TIME: 10:30 a.m.
16 ) DEPT: E
Defendant(s). )
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17 _____________________________ )
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2 Road Property”). The Bennet Road Property is listed on Schedule A
3 as real property owned by the Debtor and his unnamed spouse, with
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4 a value of $210,000.00 Schedule A, Docket Entry No. 16, Case No.
5 10-91936.
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6 The Debtor commenced a voluntary Chapter 7 case on May 20,
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7 2010. The petition lists the Bennett Road Property as his street
8 address. The nature of the Debtor’s business is listed as “Law.”
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9 The petition further states that the Debtor has not filed any prior
10 bankruptcy cases within the last 8 years. Petition, Docket Entry
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11 No. 1, Case No. 10-91936.
12 On Schedule D filed by the Debtor on June 14, 2010, the Debtor
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13 lists the Bank of New York Mellon as his only creditor having a
14 secured claim. He states under penalty of perjury that there is a
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15 codebtor, that the date the claim was incurred, nature of the lien,
16 and description of collateral is “Unknown,” the value of the
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19 June 3, 2010, the Debtor stated under penalty of perjury that Bank
20 of America had a claim for a debt incurred on August 13, 2002,
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25 correct.
26 The Motion asserts that by proceeding with a trustee’s sale
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1 proceeding, and is in violation of Rule 7001, Federal Rules of
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2 Civil Procedure (which states the matters for which an adversary
3 proceeding is required), and Rule 65, Federal Rules of Civil
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4 Procedure, and Rule 7065, Federal Rules of Bankruptcy Procedure,
5 (injunctive relief). The Motion does not assert how a non-judicial
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6 foreclosure sale usurps the court’s power relating to adversary
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7 proceedings and injunctive relief. The court construes this
8 contention to be that if the foreclosure sale is allowed to
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9 proceed, the court will be unable to grant the relief requested by
10 the Debtor in the Complaint.
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11 The Debtor next contends that he will suffer immediate,
12 irreparable injury, loss or damage in that Plaintiff/Debtor’s
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13 “current poor, physical condition will worsen and Plaintiff will
14 become homeless balanced against adding another vacant home to
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27 law office for Bank of America’s attorneys and advised them that he
28 was seeking a temporary restraining order. Though this document is
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1 not in the proper form or notarized as an affidavit and does not
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2 state that it is under penalty of perjury so as to be a
3 declaration, the court takes into account that the Debtor is
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4 representing himself in pro se, and for purposes of this ex parte
5 Motion will consider the statements as being made under penalty of
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6 perjury.
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7 On January 25, 2010, Bank of America, N.A., as the alleged
8 beneficiary under the deed of trust, instructed ReconTrust Company,
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9 N.A. to file a notice of default. The deed of trust, Exhibit 4,
10 names PRLAP, Inc. as the trustee and not ReconTrust Company, N.A.
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11 On February 9, 2010, Bank of America an assignment of trust deed
12 and a substitution of trustee, naming ReconTrust Company as the
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13 trustee. It is alleged that this assignment was for the purpose of
14 misrepresenting who is the owner of the note and deed of trust.
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23 sale.
24 Summary of Complaint
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1 Settlement Procedures Act (RESPA, 12 U.S.C. 2601 et seq.), Truth in
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2 Lending Act (15 U.S.C. § 1600 et. seq.), Fraud (California Civil
3 Code § 1709), California Unfair Business Practices Act (California
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4 Civil Code § 17200 et seq.), and breach of contract. The gist of
5 the complaint is that various improper conduct has existed with
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6 respect to loan foreclosures throughout the country. This is
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7 commonly referred to as the Robo-Signing investigations. It is
8 alleged that the Defendants have refused to provide the
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9 Debtor/Plaintiff with an accounting as required under 12 U.S.C.
10 § 2605(a)(1)(A), (f), which has caused Debtor/Plaintiff unstated
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11 pecuniary damages. Much of this part of the complaint appears to
12 focus on default swaps, obtaining funds from investors, credit
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13 obtained by Defendants, securitized loan pools into which the note
14 was transferred. These allegations do not go to the question of
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1 property from the Debtor/Plaintiff. Through this second cause of
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2 action the Debtor/Plaintiff seeks a determination of the rights of
3 the respective parties.
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4 In reviewing the exhibits filed with the original complaint,
5 there is a May 7, 2010 letter from Bank of America, to the
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6 Debtor/Plaintiff stating that it was servicing the loan for the
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7 Bank of New York, the investor. The letter does not explain what
8 is meant by referencing the Bank of New York as an investor.
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9 However, the letter does clearly state that Bank of America is the
10 entity servicing the loan, though that position is not explained in
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11 the letter. Finally, this letter unequivocally states that “Bank
12 of America did not sell your loan at anytime.”
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13 The Debtor/Plaintiff has attached as Exhibit 2 an April 6,
14 2010 letter from Bank of America to the Debtor/Plaintiff which
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17 exhibit.) This letter states that “The Bank of New York Mellon,
18 fka The Bank of New York, as trustee for the certificate holders of
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21 the note has never been sold. Additionally, the letter identifies
22 the Bank of New York Mellon as the trustee for the “certificate
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1 trust from Bank of America, N.A. to Bank of America, N.A., as
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2 servicer for GSR Mortgage Loan Trust 2003-9. This purported
3 assignment was made three months prior to the May 7, 2010 letter in
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4 which Bank of America advised the Debtor/Plaintiff that Bank of
5 America never sold the loan at any time.
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6 The Debtor/Plaintiff has attached as Exhibit 10 the notice of
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7 default issued with respect to the Note and Deed of Trust. This
8 notice was recorded on January 25, 2010 and states that ReconTrust
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9 Company is acting as the agent for the beneficiary under the Deed
10 of Trust. At this juncture, based upon the allegations in the
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11 complaint, Bank of New York Mellon was the owner of the Note, as
12 the trustee of the GSR Mortgage Loan Trust 2003-9 (the court is
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13 presuming that the reference by Bank of America to Bank of New York
14 Mellon being the trustee for the certificate holders actually means
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23 v. Tuxedo Land Co., 216 Cal. 165, 170 (1932). If one party
24 receives the note and another receives the deed of trust, the
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1 secure the payment of money, the power is part of the security and
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2 vests in any person by assignment becomes entitled to payment of
3 the money secured by the instrument. The power of sale may be
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4 exercised by the assignee if the assignment is duly acknowledged
5 and recorded.” California Civil Code § 2932.5.
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6 The Debtor/Plaintiff also alleges that the Defendants have
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7 breach their contractual obligations arising under the Note and
8 Deed of Trust. The alleged breaches include instructing ReconTrust
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9 to file the notice of default; failure to advise the
10 Debtor/Plaintiff of the transfer of the Note; failing to account
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11 for the monies received in the transfers, securitization, and
12 credit default swaps; and using the note in the GSR Trust.
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13 Debtor/Plaintiff asserts that his damages include the drop in real
14 estate values due to the Defendants “reckless, irresponsible, and
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23 has been filed, with the Defendants having filed several motions
24 attacking the complaint. These have been denied without prejudice.
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1 first amended complaint. The First Amended Complaint was filed on
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2 February 4, 2011, and the Defendants have filed a Motion to Dismiss
3 which is set for hearing on April 6, 2011. It appears that the
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4 Motion to Dismiss directly attacks the issues raised in the
5 Complaint and are inexorably tied to the issuance of injunctive
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6 relief in this case.
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7 RULING
8 Though the Debtor/Plaintiff appears to have staked his case on
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9 contentions and allegations which have nothing to do with his
10 performance on the Note – making the payments promised for the
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11 monies borrowed, he does raise a credible issue as to who owns the
12 note, and under California law, who is the beneficiary entitled to
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13 enforce the Note. At this early juncture, it appears that by the
14 time Bank of America sought to “assign” the beneficial interest to
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19 The parties must properly address who holds the note and has
20 the right to enforce the beneficial interest. The court issues the
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1 clear showing of immediate and irreparable harm. As stated above,
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2 the court accepts the pro se Debtor/Plaintiff’s statements in the
3 Motion for Temporary Restraining Order as being stated under
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4 penalty of perjury. The court shall not grant the Debtor/Plaintiff
5 shall liberties in the future, and even the pro se plaintiff must
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6 comply with basic requirements for pleadings and evidence.
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7 In balancing the hardships, there appears to be little
8 hardship for the Defendants as they have been litigating this case
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9 since August 2010, and are operating under a stipulated time line.
10 Further, it appears that the automatic stay continues in full force
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11 and effect in this case as to property of the estate, even though
12 the Debtor/Plaintiff has been discharged.
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13 not been closed and the property has not been abandoned by the
14 Chapter 7 Trustee. 11 U.S.C. § 362(c)(2). If the automatic stay
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21 At this juncture and given that the parties are already in the
22 process of addressing the issues in the Motion to Dismiss of
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23 whether there are even valid claims pled, the court finds that no
24 bond is required pending the hearing on the preliminary injunction.
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27 that the various claims and assertions attacking the home mortgage
28 market in the 2000's, Robo-Signing, and post-Pineda loan
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1 transactions by financial institutions are meritorious with respect
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2 to the obligations owed by the Debtor/Plaintiff on the Note that is
3 secured by the Deed of Trust. Debtor/Plaintiff shall have to carry
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4 his burden for any such claims at the hearing on the motion for
5 preliminary injunction, as well as the facts at his for his
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6 specific loan, payments made by him on his specific loan, the
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7 balance due on his loan, and why the holder of the note, whomever
8 it is, should not be allowed to foreclose based on the borrower’s
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9 (Pineda’s) failure to make payments for the monies borrowed.
10 The court shall issue a Temporary Restraining Order and set
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11 the hearing on the Preliminary Injunction for 10:30 a.m. on
12 March 23, 2011, at the United States Bankruptcy Court, 1200 I
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13 Street, Modesto, California.
14 Dated: March 15, 2011
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/s/ Ronald H. Sargis
15 RONALD H. SARGIS, Judge
United States Bankruptcy Court
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